Amazon Seller Fulfilled Prime 2% Fee

Category: Amazon News
Amazon Seller Fulfilled Prime 2% Fee

Amazon are to impose a 2% fee for Seller Fulfilled Prime orders in the US, from the 1st of October, according to Bloomberg.

Seller Fulfilled Prime is a half way house between FBA (Fulfilment by Amazon) and MFN (Merchant Fulfilled Network). With the former, retailers ship their products to Amazon who fulfil orders from their own warehouse. With the later, merchants keep the stock at their own facility (or alternative 3PL) and ship orders themselves when they get an order on Amazon.

Seller Fulfilled Prime is for sellers who have proven their ability to meet Prime standards of service, so it’s MFN but comes with the search visibility you’d expect to get from FBA.

2% is a pretty steep penalty for shipping your own orders, it’s 2% of the sale prices so in most cases will be a significantly higher percentage of margin. With Amazon fees of around 8-15%, plus perhaps advertising fees with Sponsored Products or Sponsored Brands on top, another 2% makes Amazon a very expensive route to market if you’re using Seller Fulfilled Prime.

We’d expect a fair number of sellers to fall in line, but not the way Amazon perhaps hopes by using FBA, it’s much more likely that they’ll stick two fingers up to Seller Fulfilled Prime and migrate to the MFN style of working. Sure there’s some potential downside in search visibility, but sellers who took the decision that they want to retain control of their stock will probably in the main decide that control is more important than a loss in sales, or paying the 2% fine for fulfilling their own orders.

It’s worth remembering that Seller Fulfilled Prime eligibility, so these sellers have already jumped through Amazon’s hoops to qualify and continue to provide sterling service to retain membership of the programme.

Although Seller Fulfilled Prime has been around in the US since 2015, enrolment closed with Amazon announcing a couple of months ago that enrolment would reopen this year.

As the program grew, we unfortunately realized that SFP was not providing the same high-quality experience that customers expect from Prime. As a result, we paused new seller enrollment while we worked to make sure we had more support for sellers and clear standards in place for the SFP program to ensure it provides customers a great Prime experience. We appreciate the sellers that have helped us work through this, and we are excited to be at the point where we will soon reopen enrollment.

We will update you in the coming months with enrollment details and updated requirements to ensure that it meets Prime customers’ high expectations. We look forward to the improved customer experience that these changes will bring.

– Amazon

It’s likely that most interested retailers that were awaiting a Seller Fulfilled Prime invite will be reconsidering their options in light of the new fee.

One Response

  1. I believe that the SFP was started by Amazon as space was limited at FBA warehouses and it was a way to increase Prime offering to customers whilst they built more warehouses and streamlined the FBA process by introducing qty levels on FBA merchants.

    I enrolled in SFP because, at the time, I could fulfil all their criteria and so get access to Prime Customers, the extra visibility and control over my stock.

    Over the years, they have eroded my control by adding 1 day a weekend that I must work as well as micromanaging who I ship with.

    Now they have more space, they probably believe that by imposing the surcharge, SFP sellers will move to FBA, some will, but some will revert to MFN, I know I will.

    I’ve had Amazon ring me to try and get me to go FBA, I usually start by telling them that there is no one at an FBA warehouse as good as me, so why would I pay for someone who doesn’t care about my business to be directly involved in it.

    If it comes over here, I will be switching over to MFN, but then, that is what I think Amazon wants!!

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